We have continued our efforts to develop in vivo and in vitro models to better understand the mechanistic role of genes highly differentially expressed in lung cancers. TGF-&#946; is a pleiotropic cytokine that plays a central role in maintaining epithelial homeostasis. In early carcinogenesis, TGF- &#946; acts as a tumor suppressor by inhibiting cell proliferation. However, in the late stage, several studies showed that primary tumor cells could reprogram their response to TGF- &#946; by dysregulation or mutational inactivation of various components of TGF- &#946; signaling pathway and through cross-interaction with other oncogenic pathways. We show here that knockdown of SMAD6 inhibited cell viability and cell proliferation through cell cycle arrest and induction of apoptosis in lung cancer cells, but not normal bronchial epithelial cells. We examined the gene expression changes and observed that knockdown of SMAD6 led to activation of TGF- &#946; signaling. Our results show that SMAD6 play a critical role in supporting cell growth and survival by inhibiting the TGF- &#946; signaling pathway in lung cancer cells. Targeted inactivation of SMAD6 could provide a novel therapeutic strategy for lung cancers expressing this gene. In our in vivo study, we have generated transgenic mice carrying a gene, PGP9.5, which is frequently over expressed in lung cancers. We are collaborating with Dr. Ilona Linnoila's laboratory to examine these transgenic animals for transgene expression as well as potential lung carcinogenesis and interactions with other lung tumor animal models. Preliminary findings from Dr. Linnoila's laboratory has shown that transgenic animal with PGP9.5 over expression in lung epithelium to EMU induced lung carcinogenesis.